Consumers lapping up cereal, paper towels in pandemic
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by John Biers
Face masks and hand sanitizer may be the signature items of the COVID-19 economy, but the upheaval in consumer behavior also is boosting sales of cereal, ketchup and paper towels.
That is one clear conclusion from the latest round of earnings reports Thursday that underscored anew how the pandemic is scrambling economic activity as more people stay home, benefitting some companies, even as it thrashes airlines, hotels and many retailers.
“We remain highly relevant across the board,” said Procter & Gamble Chief Financial Officer Jon Moeller, who thinks the shift in demand that boosted sales of the consumer product giant’s soap and cleaning products could prove lasting.
Cereal giant Kellogg is another beneficiary from the work-from-home trend.
“We’re pretty confident that the at-home consumption is going to remain elevated,” said Kellogg Chief Executive Steven Cahillane, although he described trends as “choppy.”
“It’s an unknowable what happens with this virus,” Cahillane said. “You have the virus wreaking havoc in many states in the southern part of the United States.”
But not all the upheaval has helped consumer goods producers.
Companies have been forced to spend more to employ social distancing in operations and provide employees with personal protective equipment. And there have been supply chain challenges, both to procure raw materials and to ramp up manufacturing to meet increased demand.
But the benefits generally have more than offset the costs for consumer goods companies, a group that also includes Clorox and Campbell’s Soup. And even as more economic activity returns, sales remain relatively high. (AFP)